Transwestern Pipeline Company Requests FERC Review of Proposed Phoenix Expansion Project.

HOUSTON -- Transwestern Pipeline Company has asked the Federal Energy Regulatory Commission (FERC) to begin a Pre-Filing Review of the company's proposed Phoenix Expansion Project that will provide additional natural gas to the Phoenix market and surrounding areas.

This review would

The Phoenix Expansion Project would expand Transwestern's pipeline system approximately 260 miles from its mainline in Yavapai County, Ariz., to provide an additional 500 million cubic feet per day of capacity to delivery points in the growing Phoenix market. As part of the overall project, Transwestern also proposes to build approximately 25 miles of pipeline looping on its existing San Juan Lateral. Transwestern estimates the Phoenix Expansion Project will be in service by early 2008.

The project also would provide Transwestern's existing shippers, many of who are marketers and producers, with access to additional markets for natural gas.

"The southern Arizona markets are asking for additional pipeline infrastructure to bring additional San Juan natural gas production into the region," said Shelley Corman, senior vice president and chief commercial officer. "An open season earlier this year showed that Transwestern's customers want additional pipeline capacity to transport more of the competitively priced San Juan natural gas supplies to markets downstream of the company's San Juan Lateral."

Transwestern Pipeline Company, a unit of Panhandle Energy, a Southern Union company (NYSE:SUG), operates a 2,400-mile natural gas pipeline system from the San Juan, Anadarko and Permian basins to markets in the Midwest, Texas, New Mexico, Arizona and California.

About Southern Union Company

Southern Union Company (NYSE:SUG) is engaged primarily in the transportation, storage and distribution of natural gas.

Through Panhandle Energy, the company owns and operates 100 percent of Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Sea Robin Pipeline Company, Southwest Gas Storage Company and Trunkline LNG Company - one of North America's largest liquefied natural gas import terminals. Through CCE Holdings, LLC, Southern Union also owns a 50 percent interest in and operates the CrossCountry Energy pipelines, which include 100 percent of Transwestern Pipeline Company and 50 percent of Citrus Corp. Citrus Corp. owns 100 percent of the Florida Gas Transmission pipeline system. Southern Union's pipeline interests operate approximately 18,000 miles of interstate pipelines that transport natural gas from the San Juan, Anadarko and Permian Basins, the Rockies, the Gulf of Mexico, Mobile Bay, South Texas and the Panhandle regions of Texas and Oklahoma to major markets in the Southeast, West, Midwest and Great Lakes region.

Through its local distribution companies, Missouri Gas Energy, PG Energy and New England Gas Company, Southern Union also serves approximately one million natural gas end-user customers in Missouri, Pennsylvania, Rhode Island and Massachusetts.

For further information, visit www.southernunionco.com.

Forward-Looking Information:

This news release includes forward-looking statements. Although Southern Union believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Southern Union's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.